Family Business
Hire Best Family Business Services Experts in Dubai, Sharjah, Abu Dhabi, Ajman, UAE
25+ years of Exp | helped 3000+ Family Business | 4.9* Client Rating
The legal framework for family‑owned businesses in the UAE is mainly set out in Federal Decree‑Law No. 37 of 2022 on Family Businesses. Families use this law as a structured method to handle their business operations, establish ownership transfer procedures between generations, and create formal governance rules. The law applies to UAE family businesses which decide to register their business operations with the Ministry of Economy according to the legal requirements.
At HHS Lawyers, our family business lawyers can assist you with:
- Drafting and reviewing Family Constitutions and Articles of Association
- Completing the registration of your company in the Unified Register of Family Businesses
- Providing guidance on share redemption processes along with the right of first refusal and other share transfer restrictions
- Our team will handle your legal representation during the Family Business Dispute Resolution Committee proceedings.
- We create succession plans which adhere to both UAE inheritance laws and corporate regulations.
What Is a Family Business?
A family business in the UAE can be defined as a company established in accordance with the provisions of the Companies Law. Most of its shares or stakes are owned by people belonging to a single family. The company needs to register at the Unified Register of Family Businesses with the Ministry of Economy to obtain protection under Federal Decree‑Law No. 37 of 2022 on Family Businesses.
Unlike the UAE Commercial Companies Law, the Family Business Law also allows companies to include the following provisions in their articles of association and/or memorandum of association:
- Creation of various classes of shares
- Rights of first refusal in the event a shareholder wishes to sell their shares;
- Share buy-back options in the event of a capital reduction or the bankruptcy or incapacity of a shareholder.
- Squeeze-out rights (i.e., the compulsory sale of the shares of minority shareholders to majority shareholders); and
- Unlimited number of shareholders in an LLC
To opt into the Family Business Law, a family business must be incorporated within the UAE (including within a free zone), and must be a privately owned company, trust, foundation or waqf. Public joint stock companies and partnerships are excluded.
Why the Family Business Lawyers Matters
The Family Business Law establishes a legal framework that applies to any Family Business existing in the UAE. The law aims to:
Prevent Share Fragmentation:
The law provides legal mechanisms which enable families to preserve their business ownership rights. The family ownership rights need to be protected because this system stops outsiders from purchasing company shares.
Formalise Succession:
It creates clear legal methods for transferring business ownership and management. The law reduces potential business conflicts which might occur after the founder dies.
Standardise Governance:
The law establishes a comprehensive and easy framework to regulate the ownership and governance of family businesses in the country, facilitate their transfer between generations, and support the continuity of their business.
Provide a Statutory Dispute System:
The law establishes dedicated committees called the “Family Business Dispute Settlement Committee” which handle disputes arising from family business matters. This process eliminates the need for lengthy public court procedures which incur high expenses.
Bankruptcy Protection:
One of the notable benefits of this law is that it provides mechanisms to prevent the liquidation of family assets during individual shareholder insolvency.
Who do you Requires Family Business Legal Services
- Founders and Shareholders: Business founders and shareholders who want to protect their enterprise for future generations.
- Successors and Heirs: Business successors and heirs who need legal guidance to manage their inherited business assets and voting privileges.
- Corporate Entities: All Limited Liability Companies (LLCs) that want to achieve Family Business status to obtain better legal safeguards.
- Family Offices: Family asset managers who handle multiple business subsidiaries need a single legal framework to operate their different business entities.
The establishment of a family business in the UAE requires specific documents for both company registration and family governance framework development.
Required Documents for Family Business Registration
The process of creating a family business in the UAE requires specific documents. This include but not limited:
- Memorandum of Association (MOA): The document must be updated and complies with the standards established by UAE Family Business Law.
- Family Charter (Family Constitution): The document establishes the family’s governance framework, which includes their voting rights and methods for resolving internal conflicts.
- Proof of Kinship: The official documents demonstrate family relationships between shareholders through birth certificates and family books.
- Commercial Licence: The local authority issues the valid license which all businesses must obtain from the Department of Economy and Tourism.
- Share Register: The document serves as an official record showing current share ownership together with all restrictions and encumbrances that apply to the shares.
Process for Family Business Registration
At HHS Lawyers, we assist with both reclassification of an existing company and registration of a new Family Business in Dubai (excluding free zones).
| Stage | Reclassification of Existing Company | New Family Business Registration |
| Eligibility Check | We first ensure that your current company follows the Family Business Law requirements. | We check that all legal conditions are fulfilled to establish a new Family Business. |
| Name & Structure | We assist our client in updating the company name, legal form and business activities if necessary. | We assist in reserving the trade name, choosing the appropriate legal form and activities. The chosen economic activities need to follow legal requirements for commercial, professional and industrial business operations. |
| Family Members & UBOs | We conduct a review process to update and submit complete information about family members, ultimate beneficial owners and managers along with their supporting documents. | We register the details of family members, UBOs and managers along with all the required documents. |
| MOA / AOA | We amend and submit revised Memorandum & Articles of Association to show family ownership and roles. | We draft and file new MOA/AOA showing ownership structure, profit sharing and governance roles. |
| Family Charter (Optional) | We assist in drafting a Family Charter that contains required governance, decision-making, succession planning and dispute resolution procedures as per the law. | We prepare and register a Family Charter for proper governance and future succession. |
| Approvals | We handle any approvals needed for regulated activities (if applicable) including necessary approvals from the competent authorities, if the Family Business reclassification affects any regulated activities. | We secure initial DBLC approval plus any external approvals required. |
| Office Requirement | We update office address details if changes are needed. | We assist in securing premises and obtaining Ejari or title deeds. |
| Authority Filing | We handle the application process to achieve reclassification by submitting your documents to the Dubai Business Registration and Licensing Corporation (DBLC). | We filed the full incorporation application with DBLC. |
| License Issuance | Once approved and fees paid, we obtain the updated Family Business License. | After approval and payment, we obtain the new Family Business License. |
| National Economic Register (NER) | We make sure your status is up-to-date in the NER and provide you with the optional Family Charters registration help. | NER registration happens automatically; we guide you on optional Family Charter filing. |
| Tax (FTA) | We update your Federal Tax Authority records if required. | We assist with FTA registration and obtain your Tax Identification Number (TIN). |
| Immigration & Labour (if needed) | We assist with any necessary updates to immigration or labour records. | We obtain the Establishment Card and support visa applications as required. |
| Banking & Utilities | We advise on any required changes to your bank accounts. | We help you in opening corporate bank account(s) and arrange utility & telecom connections. |
Note: For companies that are incorporated or wish to incorporate in a free zone in the Emirate of Dubai, and intend to register themselves as a ‘Family Business’ under the Family Business Law, please contact HHS Lawyers today.
Enquire NowLegal Validity and Recognition of Family Business for Wealth Management
A registered family business enjoys full legal recognition across the UAE. The Family Charter provisions take effect as binding legal obligations for all shareholders and their successors after they become part of the MOA through notarization. The law specifically allows for the enforcement of restrictions on share transfers, which are recognized by UAE courts. The law establishes a dispute resolution process that parties must complete before they can take their cases to the Court of Appeals.
Common Legal Rejections in the Process of Family Owned Business
| Reason for Rejection | Consequence |
| Inconsistent Kinship Proof | Your application will be denied if you fail to present sufficient evidence that proves your family ties and ownership of your family assets. (e.g., missing ID, UBO declaration, or required documents) |
| Non-Compliant Buy-Back Clauses | The buy-back request may be rejected if the valuation, steps, approvals, or documents do not follow Ministerial Decision No. 107/2023. |
| Ownership Dilution | Family Business status will be denied if family members own less than a majority of the shares. |
FAQ’s
Q1. What is the Unified Registry of Family Businesses?
The UAE Ministry of Economy operates a central database to record companies which fulfill legal obligations to register under the UAE Family Business Law.
Q2. Can we stop family members from selling shares to outsiders?
Yes. The law permits you to establish right-of-first-refusal clauses together with other share transfer restrictions to maintain family ownership.
Q3. Is registration under the Family Business Law mandatory?
No, it is not mandatory—it’s voluntary/opt-in. Companies have the choice to register or not. Companies which choose not to register will operate under the standard UAE Commercial Companies Law without access to the exclusive benefits which registered family businesses obtain.
Q4. Does this law change Sharia-based inheritance rules?
No, it does not change or override Sharia-based inheritance rules. The law works according to UAE inheritance principles. It enables families to control share distribution after a shareholder dies through share buy-back options and management rights.
Q5. How are disputes handled in a registered family business?
All disputes must first go to the Family Business Dispute Resolution Committee. The committee tries to settle the issue through mediation. If no agreement is reached, the case may then be taken to the court.
Q6. Can a family business issue different types of shares?
The law permits companies to create multiple share classes which include shares that provide financial benefits but have restricted voting rights.
Talk to Expert
Family businesses operating in the UAE can benefit from optional registration under the Family Business Law. It is an “opt-in” legislation, meaning that families must themselves choose to be formally registered in order to obtain such official status and the various related benefits.
The business regulations create necessary conditions which enable companies to operate successfully while keeping their shareholder connections intact. Federal Decree‑Law No. 37 of 2022 provides protections to the families to safeguard their assets, prevent share division and to establish a comprehensive plan that will be enforceable in future generations.
At HHS Lawyers, our family business attorneys will support you throughout the entire process when you require help.
